Judgment :- 1. Both the Writ Petitions arise out of the order passed by the Employees' Provident Fund Appellate Tribunal (hereinafter referred to as 'the Tribunal'), New Delhi, dated 9.2.2012 in ATA Nos.299(13)/2011, 300(13)2011, 301(13)2011 and 302(13)2011. The said order of the Tribunal came to be passed on the appeals filed by M/s.Kongarar Textiles Limited, Udumalpet, challenging the levy of damages made under Section 14-B of the Employees' Provident Funds and Miscellaneous Provisions Act, 1952 (hereinafter referred to as 'the Act'). The said appeals were filed under Section 7-I of the Act. The Tribunal, by its final order, dated 9.2.2012, in paragraph 9, observed as follows: "9. Further, the Hon'ble High Court of Kerala in the case of Indian Telephone Industries Ltd. Vs. APFC & Ors. (2006 (3) KLJ 698) and the Hon'ble High Court of Bombay in the case of M/s.Cable Corporation of India Ltd. Vs. UOI, 2006 (003) CLR 349 (Bom) settled that for belated remittance of PF dues liability to pay damages does not arise automatically, but the same will have to be decided by the PF authorities by applying mind to the merits of the case and not be resorting to arithmetical calculations. Therefore, levy of damages by following the straightjacket formula amounts calculation of damages without application of mind and is illegal and liable to struck down. Therefore, the observations made by the respondent that the employer is answerable for damages levied irrespective of the fact that the employer had suffered heavy losses, can be said to be based on wrong presumption of law and are not sustainable. A perusal of the impugned order indicates that the Officer conducting enquiry under Section 14B of the Act has not provided full opportunity to the appellant to represent its case but had imposed damages without assigning any reasons whatsoever. Therefore, keeping in view the reasons and circumstances as discussed above, ends of justice be met by restricting the damages up to 10% per annum on the arrears of the contribution. In terms of the above, the appeal is disposed of. The file be consigned to the record room copy of the order be sent to the parties." 2. Challenging the reduction of damages levied under Section 14-B of the Act, the Assistant Provident Fund Commissioner attached to the Office of the Regional Provident Fund Commissioner at Coimbatore, has filed W.P.No.15569 of 2012. The file be consigned to the record room copy of the order be sent to the parties." 2. Challenging the reduction of damages levied under Section 14-B of the Act, the Assistant Provident Fund Commissioner attached to the Office of the Regional Provident Fund Commissioner at Coimbatore, has filed W.P.No.15569 of 2012. This Court, while admitting W.P.No.15569 of 2012 on 20.6.2012, granted an order of interim stay in M.P.No.1 of 2012. Though the learned Official Liquidator was made as a party-respondent by representing the first respondent-M/s.Kongarar Textiles Limited, a report dated 8.10.2012 was filed by the learned Official Liquidator seeking to discharge him from the case on the ground that the Company, namely M/s.Kongarar Textiles Limited had been wound up by the order of this Court, dated 18.7.2008 in Company Petition No.116 of 2004, which was set aside by this Court by order, dated 27.4.2009 passed in Company Application Nos.586 and 587 of 2009 in Company Petition No.116 of 2004. Subsequently, on the impleading petition filed by M/s.Booma Realty Private Limited and Shri Ganesha Textiles, they have been impleaded as party-respondents in W.P.No.15569 of 2012 as per the order of this Court, dated 4.10.2012 in M.P.No.2 of 2012 in W.P.No.15569 of 2012. The said impleaded respondents, namely respondents 4 and 5 have also filed vacate-stay-petition in M.P.No.3 of 2012 in W.P.No.15569 of 2012, seeking to vacate the order of stay granted by this Court on 20.6.2012 in M.P.No.1 of 2012. Supporting affidavits, dated 20.9.2012 have also been filed along with the said M.P.Nos.2 and 3 of 2012 in W.P.No.15569 of 2012. 3. Subsequent to the filing of W.P.No.15569 of 2012 by the Assistant Provident Fund Commissioner, the impleaded respondents 4 and 5, have also filed W.P.No.34966 of 2012. When W.P.No.34966 of 2012 came up for hearing on 3.1.2013, this Court directed the petitioners to give notice to the Provident Fund Department. Subsequently, on 6.2.2013, this Court directed the Writ Petition filed by the Provident Fund Department in W.P.No.15569 of 2012 to be tagged along with W.P.No.34966 of 2012. 4. When W.P.No.34966 of 2012 came up for hearing on 3.1.2013, this Court directed the petitioners to give notice to the Provident Fund Department. Subsequently, on 6.2.2013, this Court directed the Writ Petition filed by the Provident Fund Department in W.P.No.15569 of 2012 to be tagged along with W.P.No.34966 of 2012. 4. Heard the arguments of Ms.R.Meenakshi, learned Standing Counsel appearing for the Assistant Provident Fund Commissioner, i.e. the petitioner in W.P.No.15569 of 2012, Mr.C.Sakthi Manikandan, learned counsel for the impleaded respondents 4 and 5 in W.P.No.15569 of 2012, who are also the petitioners in W.P.No.34966 of 2012, Mr.K.Gunasekar, learned Additional Central Government Standing Counsel appearing for the first respondent-Assistant Provident Fund Commissioner in W.P.No.34966 of 2012 and Mr.S.R.Sundar, learned counsel for the second respondent-M/s.Kongarar Textiles Limited, in W.P.No.34966 of 2012, which is also the first respondent in W.P.No.15569 of 2012. 5. It is seen from the records that the first respondent-M/s.Kongarar Textiles Limited in W.P.No.15569 of 2012 (also the second respondent in W.P.No.34966 of 2012) was running a spinning mill at Udumalpet Taluk, Coimbatore District. It was covered by the provisions of the Act. Subsequently, it became a sick industry and faced permanent closure and also stopped functioning from February 2003. It was declared as a sick unit as per the order of the BIFR, New Delhi on 27.6.1997. The said Mill is also a defaulter in remitting the Provident Fund contributions. Therefore, the Employees' Provident Fund Department took action for recovering the amount and they levied damages in terms of Section 14-B of the Act. The said Company was also facing winding-up proceedings before this Court in Company Petition No.116 of 2004. Though initially, it was directed to be wound up by the order of this Court, dated 18.7.2008 in C.P.No.116 of 2004, subsequently, by order dated 27.4.2009 passed in C.A.Nos.586 and 587 of 2009 in C.P.No.116 of 2004, the winding up order was rescinded by this Court. The said Company, namely M/s.Kongarar Textiles Limited also faced proceedings under the provisions of the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act (for short, 'SARFAESI Act') initiated by the secured creditors, namely IDBI and ICICI Banks and the said Banks in turn transferred their security in favour of M/s.Alchemist Asset Reconstruction Company Limited for consideration and the properties were brought for sale under the provisions of the SARFAESI Act. The writ petitioners in W.P.No.34966 of 2012, namely M/s.Booma Realty Private Limited and Shri Ganesha Textiles, purchased the properties along with the charge of paying all statutory dues. It is thus M/s.Booma Realty Private Limited and Shri Ganesha Textiles, came in possession of the properties (land and machinery) owned by M/s.Kongarar Textiles Limited. As against the levy of damages by the Provident Fund Department, appeals were filed by M/s.Kongarar Textiles Limited, before the Tribunal under Section 7-I of the Act, and the Tribunal took up the appeals in ATA.Nos.299(13)2011, 300(13)2011, 301(13)2011 and 302(13)2011 and after notice to the Provident Fund Department, the Tribunal substantially allowed the appeals by fixing the damages at 10%. In view of the same, the Provident Fund Department filed W.P.No.15569 of 2012 and M/s.Booma Realty Private Limited and Shri Ganesha Textiles have filed W.P.No.34966 of 2012, which was filed after obtaining leave of this Court. 6. The contention of the Provident Fund Department, namely the petitioner in W.P.No.15569 of 2012 is that the Tribunal ought not to have interfered with the levy of damages and the observation made by the Tribunal that the Department followed a mechanical percentage in fixing the damages, is not justified. The allegation of the Company, namely M/s.Kongarar Textiles Limited that they have not received proper notice, is denied. In the absence of any explanation for the delay by the employer or their successor, the Department was justified in imposing penal damages and the action of the Tribunal in reducing the damages is unjustified. If reduction of damages to the extent of 90% is sustained, it will only cause grave prejudice to the Department. 7. Per contra, the purchasers of the properties, namely the petitioners in W.P.No.34966 of 2012 contended that they have purchased the properties from a sick Company under the provisions of the SARFAESI Act. The Department as well as the Tribunal failed to take into consideration the unprecedented crisis faced by the Company, namely M/s.Kongarar Textiles Limited, and many of the spinning mills have defaulted in remittance of the Employees' Provident Fund contributions. It is further stated that the purchasers have remitted the Provident Fund contributions along with interest and there is no mens-rea in defaulting to pay the amount and therefore, the levy of damages, is totally unjustified. 8. However, this Court is not inclined to accept the contentions of both sides. It is further stated that the purchasers have remitted the Provident Fund contributions along with interest and there is no mens-rea in defaulting to pay the amount and therefore, the levy of damages, is totally unjustified. 8. However, this Court is not inclined to accept the contentions of both sides. This Court, in the decision reported in (Assistant Provident Fund Commissioner Vs. Employees' Provident Fund Appellate Tribunal, Ministry of Labour and Employment, Government of India) in W.P.Nos.17518 to 17521 of 2010, etc. batch, by order dated 21.6.2011, took an exception to the stand of the Department to become a litigant in challenging the order of the Tribunal and held that only in exceptional circumstances, the Department could challenge the order of the Tribunal and this Court also held that the Tribunal is not circumscribed by the second proviso to Section 14-B of the Act and it can independently assess the issue relating to damages and come to a conclusion one way or the other. Therefore, it is unnecessary to press into service the condition precedent for invoking the relief under Section 14-B of the Act in terms of the second proviso to Section 14-B. 9. The only question to be considered is as to whether the Tribunal has kept in mind the relevant facts into consideration before reducing the damages levied against the Company, namely M/s.Kongarar Textiles Limited. 10. It is not in dispute that the subsequent purchasers have cleared the dues and also have paid interest as per law. In such circumstances, it is always open for the Tribunal to consider the issue on hand and grant relief if a case is made out. 11. It is pertinent to refer a judgment of the Supreme Court reported in 1994 Supp (3) SCC 690 (Prestolite (India) Limited Vs. Regional Director) and in paragraph 5 therein, it was observed by the Apex Court as follows: "5. ... Even if the regulations have prescribed general guidelines and the upper limits at which the imposition of damages can be made, it cannot be contended that in no case, the mitigating circumstances can be taken into consideration by the adjudicating authority in finally deciding the matter and it is bound to act mechanically in applying the uppermost limit of the table. In the instant case, it appears to us that the order has been passed without indicating any reason whatsoever as to why grounds for delayed payment were not to be accepted. There is no indication as to why the imposition of damages at the rate specified in the order was required to be made. Simply because the appellant did not appear in person and produce materials to support the objections, the employee's case could not be discarded in limine. On the contrary, the objection ought to have been considered on merits." 12. Subsequently, the Supreme Court in the decision reported in 2008 (3) SCC 35 (Employees' State Insurance Corporation Vs. HMT Ltd. and another), accepted the above-said proposition laid down in 1994 Supp (3) SCC 690 (cited supra) and in paragraphs 21, 25 and 26 of the decision reported in 2008 (3) SCC 35 , the Supreme Court held as follows: "21. A penal provision should be construed strictly. Only because a provision has been made for levy of penalty, the same by itself would not lead to the conclusion that penalty must be levied in all situations. Such an intention on the part of the legislature is not decipherable from Section 85-B of the Act. When a discretionary jurisdiction has been conferred on a statutory authority to levy penal damages by reason of an enabling provision, the same cannot be construed as imperative. Even otherwise, an endeavour should be made to construe such penal provisions as discretionary, unless the statute is held to be mandatory in character." "25. The statute itself does not say that a penalty has to be levied only in the manner prescribed. It is also not a case where the authority is left with no direction. The legislation does not provide that adjudication for the purpose of levy of penalty proceeding would be a mere formality or imposition of penalty as also computation of the quantum thereof became a foregone conclusion. Ordinarily, even such a provision would not be held to providing for mandatory imposition of penalty, if the proceeding is an adjudicatory one or compliance with the principles of natural justice is necessary there-under." "26. Existence of mens rea or actus reus to contravene a statutory provision must also be held to be a necessary ingredient for levy of damages and/or the quantum thereof." 13. Existence of mens rea or actus reus to contravene a statutory provision must also be held to be a necessary ingredient for levy of damages and/or the quantum thereof." 13. In the above-said context, this Court does not find any case made out to interfere with the impugned order of the Tribunal, as the Tribunal has taken into account all the relevant circumstances and arrived at a conclusion to reduce the levy damages to 10% and hence, the Provident Fund Department is not justified in challenging the same. Hence, W.P.No.15569 of 2012 filed by the Provident Fund Department, is liable to be dismissed. 14. The challenge made by the subsequent purchasers in W.P.No.34966 of 2012 is also not justified, especially when they are not running the industry and they are only interested in encashing the securities, which are the land and machinery of the Mill, namely M/s.Kongarar Textiles Limited. In the said circumstances, as the said purchasers have got substantial relief from the Tribunal, it is not a fit case where any interference is called for even to reduce the said 10% of the levy of damages ordered by the Tribunal. Hence, W.P.No.34966 of 2012 is also liable to be dismissed. 15. Though the learned counsel for the petitioners in W.P.No.34966 of 2012 stated that the damages now arrived at really works out to 60%, that is making by the petitioners themselves in litigating the matter over the years, and this Court is not inclined to grant any further relief. 16. In the light of the above observations, both the Writ Petitions are dismissed. No costs. The Miscellaneous Petitions are closed.